Persons of India Origin (PIO) despite being foreign citizens can buy and sell properties in India without prior approval of the Reserve Bank of India. When it comes to supply and demand controlling prices, the supply of housing in India has a long way to go to meet demands. Property purchase in India is definitely something to look at. The cost of housing appears to be shooting up in India steadily. Take a look at the cost of hotel accommodation in India today. A charge of Rupees five thousand a day does not even get you three star hotel accommodation in most cities. If you are an Nri who often visits India for pleasure or business, then purchasing a flat in India may be something worth looking into. Agricultural Land – Farm House – Plantation Property in India Foreign citizens of Indian origin (PIO) can acquire agricultural land, farm house or plantation property in India without the approval of the Reserve Bank of India ONLY by way of inheritance. Foreign citizens of non-Indian origin however, cannot acquire agricultural property without prior approval of the Reserve
• NRI’s can acquire any immovable property in India except agricultural land, plantations or farm houses.
• Payment must be made from funds remitted from abroad by proper banking channels or from legally held NRI accounts in India to which money has been deposit from foreign earnings.
• NRI’s may sell any immovable property they own in India.
• NRI’s who already own agricultural land, plantation or farm house may dispose these by way of gift or sale to a resident person who is a citizen of India.
• Rental income can be remitted outside India after any applicable taxes have been paid
Foreign Exchange Regulation Act (FERA) An act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act (FERA) of 1973, It is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose off in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.
A title that is free of liens or legal questions as to ownership of the property
Verification of property documents by an advocate
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features
Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser's NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in from IPI 7 within period of 90 days from the date of purchase of the property/final payment of purchase consideration
Yes. However, Reserve Bank has granted general permission to foreign citizens of Indian origin whether resident in India or Abroad, to purchase immovable property in India for their bonafide residential purpose. They are therefore, not required to obtain separate permission of Reserve Bank.
Foreign citizens of Non-Indian origin (whether resident in India or not) and foreign companies including trusts, societies and associations incorporated/ registered abroad will be permitted by Reserve Bank, on application, to acquire immovable property in India, provided the following conditions are satisfied.
The property to be purchased is for residential use only.
The consideration for purchase of the property is met out of foreign exchange remitted from abroad in any convertible currency through normal banking channels
Income accruing by way of rent from the property purchased, or the sale proceeds of such property/income arising out of investment of such sale proceeds at any future date shall be credited only to the Ordinary Non-resident Rupee (NRE) account of the non-resident purchaser.
Applications for necessary permission for purchase of immovable property in India should be made in form IPI 1 together with the documents indicated therein to the Chief General Manager, Exchange Control Department, (Foreign Investment Division-III), Reserve Bank of India, Central Office, Mumbai 400 001.
The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India"
No tax benefits are available for NRI customers unless you file returns and thereby become eligible to avail of the tax benefits as mentioned under Home Loans.
Yes. Repayment of loan in foreign exchange is treated as equivalent to the foreign exchange received for purchase of residential accommodation.
No lock in period is applicable for sale of such property.
The sale proceeds of residential / commercial property received by way of gift by NRI / PIO should be credited to NRO account only.
Yes. Rent received, being current income may be credited to NRO / NRE account or remitted abroad.
Your eligibility is calculated in the same way as it is calculated for resident Indians. More emphasis is laid on the following criteria in the appraisal of a NRI case:
• Qualifications - the NRI applicant has to be graduate
• Current job profile & Past experience
• Probability of continuing abroad for the loan tenure
• Probability of servicing the loan with an extended tenure in case you have to return to India.
Under the general permission available NRI / PIO may purchase residential / commercial property in India out of funds remitted to India through normal banking channel or funds held in his NRE / FCNR (B) / NRO account. No consideration shall be paid outside India.
Under the general permission available NRI / PIO may transfer by way of sale his agricultural land / plantation / farm house in India to a person resident in India who is a citizen of India.
A person resident outside India cannot acquire by way of purchase agricultural land / plantation property / farm house in India.
Yes. Under the general permission available NRI / PIO may acquire residential / commercial property by way of gift from a person resident in India or a NRI or a PIO.
Under section 2(ze) of the Foreign Exchange Management Act, 1999 `transfer' includes among others, `gift'. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire residential / commercial property in India by way of gift.
Section 2 (v) and Section 2 (w) of the FEMA, 1999 defines `person resident in India' and a `person resident outside India' respectively.
Under FEMA residential status is determined by operation of law. The onus is on an individual to prove his / her residential status if question by any other authority.